Posted on 01/05/2023 8:12:25 AM PST by SpeedyInTexas
The Federal Trade Commission on Thursday issued a proposal to ban the use of noncompete clauses, a move that would allow workers to take jobs with rival companies or start competing businesses without the threat of being sued by their employers.
The FTC said noncompete clauses constitute an exploitative practice that undermines a 109-year-old law prohibiting unfair methods of competition. Noncompete clauses, which typically bar employees from joining a competitor for a period after they quit, affect nearly one in five American workers, according to the agency. Long associated with higher-paid managers, the clauses have also been imposed on lower-wage workers who lack access to trade secrets, strategic plans and other reasons that could be cited for hampering job switchers, the agency says.
If the FTC eventually votes to adopt the proposal, companies would have to rescind noncompete requirements they impose on workers and let employees know about the change. FTC officials say noncompetes suppress wages, restrain new business formation and hurt the ability of companies to hire workers they need to grow.
(Excerpt) Read more at wsj.com ...
They are always written way too broad.
Income tax, letting women vote, prohibition, and this.
What a POS…
“It’s just more control over private business and a bad idea.”
How is it an act of control over the business? The business is not being restrained in any way by saying that employees who no longer work for them are free to work somewhere else.
As I think about it the State and Federal governments have a stake in this issue because someone in a specialized field who is barred from working in that field due to a non-compete clause will be collecting tax-payer funded unemployment and other government assistance for the duration of the period in which they are restrained from working in their chose career.
The employers could of course opt to PAY someone their salary during the period of the non-compete. That would probably be acceptable to everyone but the employer who wants to control people long after they’re off the payroll.
Non-competes are beyond unreasonable, as they limit the ability of a person to earn a living working for whoever they choose to work for.
I was subject to these multiple times before retiring, and they were AWFUL. In one case, the employer sprung it on me AFTER I had started the job. Not part of our agreement, so I pushed back - hard - and was told “take it or leave it”. Obviously couldn’t leave it, as I had already quit the old job and was working for the new employer..they had me over a barrel with a gun to my head, so to speak. I put up a giant stink about it and they eventually allowed some reasonable changes, but they were not happy that I basically told them to pound sand on the “surprise” agreement given after the fact..
Confidentiality agreements can be used instead of non-competes to prevent workers from giving trade secret or other competitive info to a competitor.
Non-competes should be totally outlawed, IMHO. They are anti-worker and prevent people from becoming employed.
I have seen NDA’s and non competes that acknowledge they do not follow laws or regulations.
IMHO, that needs to be stopped.
Non competes in and of themselves are often not worth the paper they are written on for most areas.
So I should hire people and let them start stealing my clients?
Where does the FTC get the authority to make LAW.
I am pretty sure that protection of intellectual property would be exempt from the bar on non-compete clauses. Unless the original company forgot to make clear the ownership of such property.
I would say that is not at all true in all businesses and all circumstances. That is painting with a broad brush that embodies the same problem as doing away with ALL non-competes. Certainly, not all the secrets of Twitter were known until you had Musk open up the can of worms. I work for a small community bank. We have information and data that not only we consider proprietary, but are required by law to treat securely. They need to take a deep breath, take a step back and think really hard before they pass junk legislation like this.
Patents and copyrights exist to protect intellectual property.
Most non-compete clauses are just piling on and punitive.
Because you got YOURSELF a $**t deal, I should have to hire people who can start stealing clients on day one? Others must pay, because you're stupid.. or feel slighted.
Your parents raised a good little Marxist.
“I would say that is not at all true in all businesses and all circumstances.”
Not true YET. The trend is clear and you can try to fight the trend, but you’re not going to stop it or reverse it. The winners, just like the winners in any technological revolution, will be the people who recognize the trend and adapt to it, not those who futilely try to struggle against a trend that is inevitable.
“We have information and data that not only we consider proprietary, but are required by law to treat securely.”
Sure, but you can’t stop anyone who is actually intent on accessing that information from getting their hands on it if they really want to. Or from distributing that information to anyone on the planet who is interested in it. You can only throw up a few minor hurdles to make it a bit more difficult for them, and even that ability will become less and less effective as time goes by.
There would be fewer unscrupulous employees if there were fewer unscrupulous employers.
I have had three of my original works stolen and made many other management people ( both public and private ) wealthy.
Businesses need something more specific, rather than the broad non-compete now used. A person can take their skills and general life knowledge with them. They cannot contact old customers, but can respond to requests generated by their old customers. They absolutely cannot use trade secrets, research, copyright material, from their old company. Leave in a short period of non-compete overall, say two weeks. Smart people and companies that want them, already know how to get around non-compete clauses. It is lower level employees who just want to take their skills to another company, who get penalized by non-compete clauses.
I have signed many non compete contracts with clients for my engineering and design skills. I always negotiate a way out of them or compensation for abiding them. But I would have to be a fool to use another company’s IP in my industry. I get paid to start projects from scratch and usually charge hourly. If I were to steal another company’s designs I would lose out on all the work it takes to start over from scratch.
Are you okay with someone with specialized skills being blocked from their career path for a year or more and then having to collect unemployment and other government welfare until they can work again?
Wouldn’t that be a government subsidy of the employer’s NCC policy?
In many tech companies it is the lower staff that have actual info that is useful
I had noncompete clauses in every contract I ever signed
Never bothered me
Bwahahahaha
—“If you feel that some provision of your labor agreement is a violation of your civil rights, then don’t sign it.”
Every year I had to update the company NDA/NCA and every year a handful would bitch and moan...
But they always clammed up in the HR office?
They are generally unenforceable anyway, other than some rare exceptions.
In effect, the company is saying: "We'll pay you $1 million for your 10% ownership stake in this $10 million company, but only if you agree that you won't compete with us for the next two years. That's because this company isn't going to be worth $10 million if you go somewhere else and take 10% of our clients away from us."
I have never seen this sort of agreement as a problem in any way. The only sticking points in the agreements I've dealt with was the definition of "compete" as laid out in the contract.
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